"Wealthfront, the pioneer of smart investment advisory," has a large asset scale of $92.8 billion, with revenue hitting a record high during the U.S. stock market bull run
The intelligent investment advisory platform Wealthfront announced its quarterly financial report, with revenue reaching a record high of $93.2 million, a year-on-year increase of 16%, and platform assets totaling $92.8 billion. Benefiting from the bull market in U.S. stocks, the transfer of funds from cash accounts to investment accounts by clients reached an all-time high, reflecting an increase in investors' risk appetite. The company completed its IPO last month, becoming the first publicly listed intelligent investment advisory company in the U.S. stock market
The bull market in the U.S. stock market is driving growth in the robo-advisory industry.
On January 12, Wealthfront, the first publicly listed robo-advisory company, announced its quarterly financial report for the period ending October 31, showing that net profit reached $30.9 million, a year-on-year increase of 3%; revenue hit a record $93.2 million, a year-on-year increase of 16%. This wealth management company, headquartered in Palo Alto, California, saw its total assets grow by 21% year-on-year to $92.8 billion.
CEO David Fortunato stated that in a dynamic macro environment, the company's core business continues to drive platform assets to set a record at the end of the quarter. This quarter, the net transfer of clients from cash management accounts to investment advisory accounts reached a historical best for the company.
As of the end of the quarter, Wealthfront had 1.38 million funded clients, a year-on-year increase of 20%. The total assets of $92.8 billion encompass both investment advisory and cash management businesses.
This performance reflects the environment of the U.S. stock bull market, where investor risk appetite has increased, and there is a clear trend of funds flowing from savings accounts to stock investment accounts. Wealthfront completed its IPO last month, becoming the first publicly listed robo-advisory platform.
Cash Management Business Faces Challenges
Despite the increase in total assets, the net deposit inflow for the quarter was $1.6 billion, down from $4.4 billion in the same period last year. Wealthfront's cash management business has been a growth engine in recent years, currently offering new clients an annualized yield of 3.9%. Due to the significant revenue contribution from this business, the company is sensitive to interest rate fluctuations. Analysts point out that while lower interest rates may weaken the appeal of cash products, they may also encourage clients to redeploy funds into automated investment accounts.
However, the company is committed to product diversification to capture a wealthy and tech-savvy client base. In addition to expanding tax-loss harvesting services, Wealthfront has recently begun offering mortgage services in places like Colorado. Fortunato stated during the earnings call that the company hopes to win the market with competitive rates and a seamless digital experience, believing there is an opportunity to achieve substantial business volume over time.
After the earnings report, Wealthfront's stock price fell nearly 2%.
